The European Union has already introduced protective duties on Chinese-made electric vehicles, limiting them to 36.3% in the worst case scenario. The United States is preparing to raise duties to 100%, and from October 1, the Canadian authorities will follow their example, as Prime Minister Justin Trudeau announced. earlier this week. Even Tesla, which actively supplies its electric vehicles from China to Canada, will not receive any concessions.
Image source: BYD
To be more precise, another 100% will be added to the already existing customs duty rate on Chinese electric cars of 6.1% from October 1st. At the new rate, not only electric passenger cars will be imported, but also certain types of hybrids, trucks, buses and commercial vans. Tesla, which last year began supplying its Shanghai-assembled electric cars to Canada, will not receive any concessions against this background; its products will also be subject to increased duties. Experts expect that after the introduction of new rates, the company will have to import American-assembled electric vehicles into Canada. At the same time, Canada itself is a major exporter of cars, if we talk about the American direction. Last year it shipped about 1.5 million cars to the United States.
Electric vehicles will not be the only category of goods from China that will be subject to increased tariffs. From October 15, steel and aluminum from China will be subject to a 25% duty. In addition, the government will hold public hearings within 30 days on the issue of introducing additional duties on other categories of goods supplied from China. Traction batteries and components for their production, semiconductor cells, solar panels and critical minerals may join the list.
Justin Trudeau’s speech about the motives that prompted Canadian authorities to impose customs duties on Chinese electric vehicles was dominated by the concepts of “overproduction” and “unfair advantage.” The Canadian government has also decided to limit consumer subsidies for the purchase of electric vehicles to only those cars that are assembled in friendly countries or have free trade agreements with Canada. Chinese diplomats have traditionally called the accusations against the country groundless, accused Canada of violating WTO rules and promised to take all possible measures to protect the legitimate interests of Chinese enterprises.
Last year, imports of Chinese electric vehicles into Canada grew 22-fold to $1.6 billion in value, but the bulk of the increase came from Tesla cars assembled in Texas. The Chinese authorities added that the actions of their Canadian colleagues would undermine normal economic and trade cooperation between the two countries, as well as harm Canadian businesses and consumers.